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Alabama House Members Calling for Review of RSA Performance

Brandon Moseley

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By Brandon Moseley
Alabama Political Reporter

Alabama House member Jim Patterson (R) from Meridianville is calling for an outside audit of Retirement Systems of Alabama investment performance. Rep. Patterson said, in an exclusive interview with the Alabama Political Reporter. “We are not getting good information.”

Rep. Patterson said that during the last ten years Retirement Systems of Alabama has been one of the worst performing public pension funds. Those numbers are based on valuations set by auditors hired by the RSA. In the last fifteen years, the Alabama state teachers’ pension fund has invested heavily in hard assets like commercial real estate, Alabama TV stations, Alabama newspapers, golf courses, and a box car factory. Valuing real property like real estate and businesses is an inexact science and Patterson questions the methodology used by RSA.

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“Commercial property has been the worst performing investment of the last five years.” Rep. Patterson questioned the real values of RSA’s holdings and says he suspects that the numbers could be worse than what RSA is reporting to the public. Patterson said that he fears that this could “the biggest scandal in this state (Alabama).”

Alabama House of Representatives member Blaine Galliher (R) from Gadsden says, “There is this erroneous assumption that Dr. Bronner is doing an excellent job. Maybe early on he did, but he hasn’t in the last ten years.” Dr. David Bronner has been the CEO of Retirement Systems of Alabama, which manages the pension funds for Alabama’s teachers, state employees, and state judges since 1973.

Galliher wrote on his Facebook account: it is “important that all read this article and realize, there is no such thing as “too big to fail.” I am not advocating taking over RSA–BUT–we put in close to $1 billion to shore up the RSA last session and it is anticipated that we will have to put in over $1 billion for 2013. That is money that could be used for raises, equipment, buildings, technology, and many other needs. This is real. I am really aggravated about those that advocate Bronner as the best thing since sliced bread, when for the last ten years RSA has been in the bottom 10 percent of retirement programs in the U.S. Again, I do not want to take over RSA but it is $1 billion of taxpayer money that should be going to the educational system and employees. I do think it is time that there be an accounting to the taxpayers since it is their money. If you are a public employee it is your money that is at stake. All I am asking for is answers to your return on investments and your retirement future. Again, not wanting the legislature to “take over” RSA as being purported but I do want some answers to tough questions like how much are the golf courses making? Why wasn’t there a prior lease on the rail car plant? Why did we continue to buy stock in USAir when we knew it was going bankrupt? I am not a financial genius but I too have an investment in this issue.”

By Alabama law, when RSA does not return at least 8 percent on its’ investments, the Alabama taxpayers have to pay in to the RSA to make up for the poor performance of RSA’s investments. This money is taken from the Alabama Education Trust Fund. Last year, the state legislature increased the amount of contribution that teachers paid into their retirements. Rep. Galliher said that this was due to the poor returns of RSA’s investments. Rep. Galliher said that when Dr. Bronner began diversifying into newspapers, television stations, and golf courses performance declined. Alabama House member Galliher says that the taxpayer money that the state legislature will have to use to shore up RSA could and should have been used in the classroom. “We are at the bottom versus other states. I would like to see some accounting. The teachers have not gotten raises in years. Every dollar is important.”

Alabama House member Jim Patterson says that RSA has a “fiduciary responsibility to the teachers” whose pension funds that RSA manages. “His fiduciary responsibility is not industrial recruitment.” Patterson said that Dr. Bronner has made several investment decisions to increase political power rather than to get the best return for Alabama’s teachers. Rep. Patterson cited as examples: RSA’s purchase of Community Newspaper Holdings, which owns over 100 small newspapers including some in Alabama and RSA’s ownership of Raycom Media which owns over 40 television station in the Southeast, including Fox 6 in Birmingham and Channel 12 in Montgomery. Patterson said, “The reason they own the TV stations is political power.”

Rep. Patterson questioned the close relationship between Dr. Bronner and RSA and the teacher’s union (AEA) run by Executive Secretary Paul Hubbert until his recent retirement,. Paul Hubbert in addition to his duties at AEA as Chairman of the Board of the Teacher Retirement System and the Public Education Employee’s Health Insurance Plan (PEEHIP) Board of Control, Patterson said that “AEA is the political arm of RSA. If you ask the average teacher, they will say that David Bronner is doing an excellent job because that is what they read in that little paper AEA puts out (the Alabama School Journal). The truth is he hasn’t. Dr. Bronner has been allowed to do whatever he has wanted to do” and for the last fifteen years he has not performed.

Both Representatives Galliher and Patterson were also critical of Dr. Bronner’s decision to invest $625 million in building a railroad car factory in Colbert County. Navistar has recently announced that they would lease the plant that RSA built.  Rep. Galliher estimated that the RSA has lost over $300 million on that investment.

David Bronner also used RSA funds for a leverage buyout of the airline USAir. Eventually, USAir ended up in bankruptcy and an estimated $300 million of pension fund was lost.

Rep. Patterson said that “AEA blames Republicans” for declining teacher take home pay. “They should be blaming Dr. Hubbert and Dr. Bronner for propping up their little empire.” Rep. Patterson was also critical of a contract that RSA has with a law firm in New York. According to Rep. Patterson, Dr.Bronner’s son is the highest paid lawyer at that firm on that contract. Rep Patterson said that Dr. Bronner and his staff, including Mark Reynolds, pay should be based on investment performance and not be paid direct salaries….salaries Rep. Patterson called “exorbitant.”

Rep. Patterson said that he did not favor giving the legislature control of RSA but said that the state “needs an independent investment guy” running RSA and the RSA “need to make money.” ”You can make money in any market. Hubbert and Bronner are running RSA. The RSA manager ‘needs to get the best he can get for the teachers.’”

Rep Patterson said that the state needs a report to teachers and taxpayers about the real health of RSA’s investments. “I would like to see an independent audit. All I want are the facts. Are we doing good, or are we not doing good?”

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Elections

Phil Williams says GOP will defend Senate District 10

Brandon Moseley

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Saturday Etowah County Republican Party Chairman Phil Williams told the Etowah County Republicans that the Republican Party would make sure that Cherokee County cattle farmer Andrew Jones will have the resources needed to defend the Senate District ten seat that Williams is vacating.

On June 5, Jones defeated state Representative Mack Butler, R-Rainbow City. Most political observers expected Butler to win the Republican primary; but the general election against state Representative Craig Ford (I from Gadsden) was considered to be a challenge. Jones defeated Butler 53.43 percent to 46.57 percent 12,516 to 10,907. The Alabama Democratic Party is not fielding a candidate in District 10.

“It is painful not to see Mack Butler in an elected position,” Chairman Butler said. “I have had plenty of discussions with Andrew Jones and with upper level and state leaders to make sure that he has all the resources he needs to make sure that a Republican holds that seat.”

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Williams said that he is impressed with how hard Jones worked and how popular he was in Cherokee County and the inroads that he had made even in Etowah County.

“I feel comfortable that Andrew will have the resources,” Williams said. “This race will be high profile. It is one of the few deeply contested senate seats in the state I have talked with Del Marsh and Andrew has talked with Marsh.”

Williams said that Marsh has assured them that there will be resources to help Jones.
Senate President Pro Tem Del Marsh, R-Anniston, is heading the efforts to re-elect a Republican senate majority.

Following the primary win Jones said in a statement:

“I’M EXCITED TO ANNOUNCE MY VICTORY in the State Senate 10 Republican Primary. I’d like to thank my family for their support, and I’d also like to thank Mack Butler for running a spirited campaign. I humbly ask all of Mr. Butler’s supporters for their help in the General Election on November 6. All of the credit for our victory goes to our volunteers and supporters, without whom our victory today would not have been possible. Many of you may not realize that we were outspent somewhere in the neighborhood of 10 to 1 in this campaign. We just continued to focus on taking our message directly to the voters. With our victory today, I hope we have shown that hard work and a clear message still has the power to resonate with Alabama voters.”

While Ford is running for the Senate as an independent, he was formerly the House Minority Leader for the Democrats.

State Representative Becky Nordgren, R-Gadsden, told the group, “I have started putting up signs after the primary. We are in it to win it and help push the liberals back.”

Gil Isabel is running for the House seat that Craig Ford is vacating to run for the senate.

“This seat has been held by a Democrat for many many years,” Isabel said. “I don’t want to overpromise and under deliver.”

Isabel said that it takes a team effort to represent Etowah County and that he is a team player.

“It is time for a change,” Isabel said.

Both Isabel and Nordgren face Democrats in the general election on November 6.

Democrats had held Senate District ten for many years until Williams upset longtime incumbent Larry Means, D-Attalla, in the 2010 election and then defeated a challenge from Means again in 2014.  In 2014 Williams beat Means 17,967 (52 percent) to 16,530 (43.9 percent),

Senate District Ten was redrawn in 2017 after the Alabama Legislative Black Caucus sued all the way to the U.S. Supreme Court to have some districts redrawn to be more competitive for Democrats and provide more influence for minorities. A portion of staunchly Republican St. Clair County had been in the district. They no longer are and SD10 now includes more of Dekalb and Cherokee County in addition to Etowah County.

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The number of Alabamians working is at an 11-year high

Brandon Moseley

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Friday Alabama Department of Labor Secretary Fitzgerald Washington announced that Alabama’s wage and salary employment measured 2,042,400 in June, a ten-year high. The last time it measured at or above this level was in December 2007, when it measured 2,045,800. This is the largest number of Alabamians working since before the Great Recession.

“Wage and salary employment in Alabama continues to increase significantly month after month,” said Washington. “This month’s count is the second largest we’ve ever recorded, yielding only to pre-recessionary numbers. It represents the most jobs our economy has supported in more than a decade. Employers are hiring in Alabama, jobs are available in Alabama, and people are working in Alabama.”
Over the year, wage and salary employment has increased 21,600, with gains in the manufacturing sector (+4,600), the leisure and hospitality sector (+4,400), and the professional and business services sector (+4,000), among others.

Wage and salary employment increased in May by 7,000. Monthly gains were seen in the leisure and hospitality sector (+2,300), the manufacturing sector (+1,800), and the education and health services sector (+1,300), among others.

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“We know that our economy is supporting record numbers of jobs, and we also know that Alabamians are working in record numbers – the most in more than 11 years,” Washington added. “Twenty-one thousand more people are working now than they were last year. That means more Alabamians are supporting their families, and spending money in their communities.”

Congressman Mike Rogers (R-Saks) said, “Great news for the State of #Alabama under Donald J. Trump leadership! Wage and Salary Employment in our state at a TEN YEAR HIGH!

Alabama’s preliminary, seasonally adjusted May unemployment rate is 3.9 percent, a slight increase from April’s record low rate of 3.8 percent, and well below May 2017’s rate of 4.6 percent.

Shelby County has the lowest employment rate at just 2.7 percent. Cullman has just 3.1 percent. Marshall has just 3.2 percent. Washington County has the highest unemployment at 8.95 percent. Greene County has 7.2 percent and Clarke County had 6.9 percent.

Nationally the news has been good almost across the economy. The U.S. unemployment rate is just 3.8 percent.

For the first time since such record-keeping began in 2000, the number of available positions exceeded the number of job seekers, the Labor Department said earlier this month.

The U S. Labor Department reports that the total number of workers receiving unemployment benefits has dropped to just 1.75 million: the lowest number since December 1973 when the population and the workforce were much smaller than they are now.

Alabama Governor Kay Ivey (R) has been touting the incredible job numbers as she campaigns across the state for her own term as Governor. Republicans are hopeful that Americans will take not of the rising economic tides and will reward GOP candidates at the ballot box in November.

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Ivey says Trump Administration import tariffs would harm Alabama economy

Brandon Moseley

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(ADAM BRASHER/THE AUBURN PLAINSMAN)

Monday, Alabama Governor Kay Ivey (R) warned the Trump Administration that import tariffs could harm the Alabama economy.

“Import tariffs and any retaliatory tariffs on American made goods, will harm Alabama.” Ivey said in a statement critical of proposed new tariffs on foreign imports by the Trump Administration.

Donald J. Trump (R) was elected President of the United States vowing to fight what he called one sided trade deals.

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“Alabama has a rich history as a leader in manufacturing, a legacy which continues in large part, through our five automotive original equipment manufacturers and our over 200 supporting suppliers that have helped establish “Made in Alabama” as an internationally-respected brand,” Ivey said. “Last year proved to be a banner year for auto industry growth in Alabama, with nearly $3 billion in automotive-related investments. Before the recent announcement of a new Mazda-Toyota plant, and other automotive-related growth, more than 57,000 Alabamians were already employed by our auto manufacturing sector, a number which is expected to increase. However, this growth could be stymied if tariffs are imposed on the goods we export around the world.”

“In 2017, Alabama reached a record high of $21.7 billion in exports, with our auto industry accounting for $10.9 billion of those exports,” Ivey continued. “The largest importers of Alabama made goods and services were Canada, China, Germany, Mexico and Japan – all countries which may be forced to reciprocate in response to any new import tariffs.”

“Import tariffs, and any retaliatory tariffs on American made goods, will harm Alabama, the companies that have invested billions of dollars in our state, and the thousands of households which are dependent upon those companies for a good-paying job,” Ivey wrote in her statement. “I strongly oppose any efforts that may harm those companies that employ thousands of Alabamians and contribute billions to our economy. I am committed to protecting Alabama jobs and consumers, the world over, who are proud to purchase products made in Alabama.”

Gov. Ivey was at the White House on Monday for a meeting of the National Space Council. President Donald J. Trump (R) addressed the group and announced the creation of his new Space Force.

Trump said on the Whitehouse web site: “From now on, we expect trading relationships to be fair and to be reciprocal.”

President Trump has imposed a number of tariffs on countries that the administration says do not have a fair trade relationship with the United States.  These nations include historic allies like France, Canada, and Mexico.  They also include China which the administration is threatening with strong trade penalties by the end of June.

The Trump Administration recently announced that the United States will implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology. The list of restrictions and controls will be announced by June 30, 2018.

The Administration wrote that: “China has consistently taken advantage of the American economy with practices that undermine fair and reciprocal trade. For many years, China has pursued industrial policies and unfair trade practices—including dumping, discriminatory non-tariff barriers, forced technology transfer, over capacity, and industrial subsidies—that champion Chinese firms and make it impossible for many United States firms to compete on a level playing field.”

“China’s industrial policies, such as its “Made in China 2025” plan, harm companies in the United States and around the world,” the Administration stated. “China imposes much higher tariffs on United States exports than the United States imposes on China. China’s average tariff rate is nearly three times higher than the average United States rate. Certain products are even more imbalanced, for instance the United States charges a 2.5 percent tariff on Chinese cars, while China currently maintains a 25 percent tariff on cars from the United States.”

“China has banned imports of United States agricultural products such as poultry, cutting off America’s ranchers and farmers from a major market for their goods.” the Trump Administration continued. “China has dumped and unfairly subsidized a range of goods for the United States market, undermining America’s domestic industry. In 2018 alone, the Trump Administration has found dumping or unfair subsidies on 13 different products, including steel wheels, cold-drawn mechanical tubing, tool chests and cabinets, forged steel fittings, aluminum foil, rubber bands, cast iron soil pipe and fittings, and large diameter welded pipe.

In January 2018, the Trump Administration ruled that China’s overproduction of steel and aluminum.
The head of the President’s Council of Economic Advisors, Lawrence Kudlow recently wrote an op-ed in the Washington Post and released on the Whitehouse website.

“Our friends and foes alike should recognize that President Trump has been remarkably faithful in keeping his campaign promises,” Kudlow stated. “From massive tax cuts to historic regulatory reduction to forcefully challenging one-sided international agreements, he has done exactly what he said he would do. There’s a simple lesson in President Trump’s record of achievement: Believe him.”

“Nowhere is this lesson clearer than when it comes to President Trump’s passion as a trade reformer,” Kudlow continued. “President Trump supports a vision of free trade that is fair and reciprocal. As a pro-growth reformer, the president understands that fair and reciprocal trade can knock down barriers, open up export markets and increase investment, which is the path to lasting economic growth. But this vision has been thwarted in recent decades by a lack of reciprocity, along with unfair and often illegal trading practices, including massive intellectual property theft. Country after country has been putting our global trading system at risk by raising tariffs and non-tariff barriers, protecting sectors from automobiles to agriculture. So do not blame President Trump for taking decisive actions that protect our American workers.”

“Past U.S. administrations — both Republican and Democrat — have paid only lip service to dealing with this breakdown,” Kudlow stated. “Not President Trump. He has shown courage and decisiveness to prevent harm to the American economy and its workforce.”

Some economists have expressed fears that Trump’s proposed tariffs could lead to retaliation and a trade war that could result in a global economic down turn.

The unemployment rate in Alabama is just 3.9 percent.

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Alabama House Members Calling for Review of RSA Performance

by Brandon Moseley Read Time: 6 min
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